Free credit report is just a start

Thanks to Uncle Sam and the updated Fair Credit Reporting Act (FACTA), soon all Americans will be able to get a free, once-yearly look at the rundown of their borrowing and banking history. That’s right — free copies of our credit reports!

This privilege is rolling out across the nation but isn’t yet in effect in every state. Click over to www.annualcreditreport.com to see when free access to credit reports will be available in your state. There you’ll have the option of reviewing your “consumer disclosure” from one, two or all three of the major credit reporting bureaus — Equifax, TransUnion and Experian.

As FACTA slowly works its way across the country, you might not want to let your file go unchecked while you wait for the federally mandated freebie. If you’re planning any banking maneuvers within the next three to nine months, ordering your credit report now may be well worth it. Consider going beyond the free reports, though. A CNN/Money article at http://money.cnn.com/ 2004/12/03/pf/saving/willis_tips points out that beyond the free reports, it’s important to check your credit “score,” too. Each agency has a score for you, a number that lenders pay a lot of attention to, sometimes even bypassing the rest of your credit report. (Fool readers can get a single report with data from the three major credit reporting agencies, as well as three credit scores, for $35. Details are at www.truecredit.com/fool.)

Interested third parties will be checking your credit if you want to finance a car, buy a home, refinance, apply for a credit card — and sometimes even if you’re just applying for a job! Your credit report will reveal who’s been doing a background check on you.

One more reason to check your report is to look for errors. Some blemishes might be of your own making, but studies show that up to 25 percent of reports contain serious errors that can cost you a lot. Errors can be fixed, though. Get credit info and tips at www.fool.com/ccc and www.cardweb.com.

Ask the Fool

Who’s on Board?

Q: How can I find out who’s on the board of directors for stocks I own or might buy? — F.O., Champaign, Ill.

A: You can often find a list of a company’s board members on its Web site. Look for links labeled something like “company information,” “about us,” “investor relations” or “annual reports.” You can also call the company’s investor relations department and ask.

Q: What does it mean when a stock analyst refers to a “catalyst”? — A.E., St. Louis

A: In that context, a catalyst is usually a factor or event that will prompt a change in a stock’s value. Consider that it’s best to invest in stocks that are trading below their fair value, as you can expect them to eventually catch up. But when and why will they do so? When analyzing a potential investment, it can be useful to figure out what expected catalyst(s) there are, as the catalysts will help the stock become fully valued.

A catalyst for a pharmaceutical company could be Food and Drug Administration (FDA) approval of a promising new drug.